(6) In the absence of the Chairperson from any meeting of the Council, the Cabinet Secretary shall chair the meeting. (7) The Council may determine its own rules and The Public Finance Management Act, 2012 170 procedures in such manner as it considers appropriate. (8) The Council may invite other persons to attend any of its meetings. Vacation of office by a member. 188. A member of the Intergovernmental Budget and Economic Council shall cease to be a member if that person ceases to hold office by virtue of which he or she became a member to the Council. The process of sharing revenue The process of sharing revenue. 189. The process of sharing revenue raised by the national government between the national and county governments, and among the county governments, shall be in accordance with the Constitution and this Act. Recommendations of the Commission on Revenue Allocation.

190. (1) At least six months before the beginning of the financial year, or at a later date agreed between the Cabinet Secretary and the Commission on Revenue Allocation, the Commission shall submit to the Senate, the National Assembly, the County Assembly, the National Executive and the County Executives, recommendations for the following financial year regarding— (a) an equitable division of revenue raised nationally, among the national and county levels of government; and (b) the determination of each county’s equitable share in the county share of that revenue.

(2) When making its recommendations, the Commission shall take into account the criteria listed in Article 203(1) of the Constitution. Division of Revenue Bill and County Allocation of Revenue Bill. 191. (1) Each year when the Budget Policy Statement is introduced, the Cabinet Secretary shall submit to Parliament a Division of Revenue Bill and County Allocation of Revenue Bill prepared by the National Treasury as provided in this Act for the financial year to which that Budget relates. (2) The Division of Revenue Bill shall specify the The Public Finance Management Act, 2012 171 share of each level of government of the revenue raised nationally for the relevant financial year.

(3) The County Allocation of Revenue Bill shall specify— (a) each county’s share of that revenue under subsection (2); and (b) any other allocations to the counties, from the national government’s share of that revenue, and any conditions on which those allocations shall be made. (4) Before the submission of the Division of Revenue Bill and County Allocation of Revenue Bill, the Cabinet Secretary shall notify- (a) the Intergovernmental Budget and Economic Council; and (b) the Commission on Revenue Allocation. (5) When the Division of Revenue Bill or County Allocation of Revenue Bill is submitted, it shall be accompanied by a memorandum which explains— (a) how the Bill takes into account the criteria listed in Article 203(1) of the Constitution; (b) the extent of the deviation from the Commission on Revenue Allocation’s recommendations; (c) the extent, if any, of deviation from the recommendations of the Intergovernmental Budget and Economic Council; and (d) any assumptions and formulae used in arriving at the respective shares mentioned in subsections

(2) and (3). PART VI—PUBLIC SECTOR ACCOUNTING STANDARDS BOARD Establishment of the Board. 192. There is established a Public Sector Accounting Standards Board which shall perform the functions set out in this Part. The Public Finance Management Act, 2012 172 Composition of the Board. 193. (1) The Accounting Standards Board shall consist of a representative of each of the following bodies who shall serve on a part-time basis— (a) the National Treasury; (b) the Controller of Budget; (c) the Intergovernmental Budget and Economic Council; (d) the Auditor-General; (e) the Institute of Certified Public Accountants of Kenya; (f) the Association of Professional Societies of East Africa; (g)the Capital Markets Authority; (h) the Institute of Internal Auditors; and (i) the Institute of Certified Public Secretaries of Kenya.

(2) The Cabinet Secretary shall appoint a chairperson of the Board from members nominated under subsection (1). (3) In making nominations to the Board, the respective organisations shall ensure that their nominees are certified members in good standing of a professional body in accounting or finance recognised by law in Kenya. (4) Members of the Board except ex-officio members shall be appointed by the Cabinet Secretary and serve for a term of not more than three years. (5) The National Treasury shall provide secretariat services to the Board and assign or appoint such support staff as may be necessary for the Board to effectively perform its functions.

(6) The Board may establish and regulate its own operating procedures. Functions of the Board. 194. (1)The Accounting Standards Board shall provide frameworks and set generally accepted standards for the development and management of accounting and financial systems by all State organs and public entities, and shall in particular perform the following functions— (a) set generally accepted accounting and The Public Finance Management Act, 2012 173 financial standards; (b) prescribe the minimum standards of maintenance of proper books of account for all levels of Government; (c) prescribe internal audit procedures which comply with this Act; (d) prescribe formats for financial statements and reporting by all state organs and public entities; (e) publish and publicise the accounting and financial standards and any directives and guidelines prescribed by the Board; (f) in consultation with the Cabinet Secretary on the effective dates of implementation of these standards, Gazette the dates for application of the standards and guidelines; and (g) perform any other functions related to advancing financial and accounting systems management and reporting in the public sector.

(2) In setting the standards under subsection (1), the Board shall take into account any relevant factors including— (a) best international accounting practices; and (b) the capacity of the relevant entity to comply with the standards. (3) The Board may set different standards for different categories of entities to which these standards apply including to develop content, structure and format of county frameworks and accounting and financial guidelines which are in line with the setting of county standards. (4) The Board shall monitor the adherence to the standards by all State organs and public entities.

(5) The standards set by the Board shall promote transparency and other Constitutional values and principles in effective, prudence and efficient management of revenue, expenditure, assets and liabilities of the institutions to which The Public Finance Management Act, 2012 174 these standards apply. Vacation of office and remuneration of Board members. 195. (1) A member of the Accounting Standards Board, other than an ex-officio member, may— (a) at any time resign from the Board by notice in writing to the chairperson; (b) be removed from the Board if the member— (i) has been absent from three consecutive meetings of the Board without the permission of the chairperson; (ii) is adjudged bankrupt or enters into a composition scheme or arrangement with his or her creditors; (iii) is convicted of an offence involving dishonesty or fraud; (iv) is convicted of a criminal offence and sentenced to imprisonment for a term exceeding six months or to a fine exceeding one hundred thousand shillings; (v) is incapacitated by prolonged physical or mental illness or is deemed unfit to discharge his or her duties as a member of the Board; or (vi) ceases to be a member by virtue of the withdrawal of his or her nomination to the Board by the nominating institution. (2). The remuneration payable to members of the Board shall be determined by the Salaries and Remuneration Commission.

PART VII — ENFORCEMENT PROVISIONS Offences by public officers. 196. (1) A public officer shall not spend public money otherwise than authorized by the Constitution, an Act of The Public Finance Management Act, 2012 175 Parliament or County legislation. (2) A public officer shall not raise revenues other than in accordance with the Constitution, an Act of Parliament or an Act of a County Assembly. (3) A public officer shall not enter into any obligation that has financial implications for the national government budget or a county government budget unless the obligation is authorised by the Constitution, an Act of Parliament or an Act of a County Assembly.